Economist: Euro crisis could erupt again this year

DAVOS, Switzerland — Is the euro crisis over? A leading US economist says not by a long shot. Even as the head of the European Central Bank talked of “positive contagion” in the markets and predicted an economic recovery for the recession-hit eurozone later this year, economist Barry Eichengreen warned that the debt crisis that has shaken Europe to its core could easily erupt again this year unless European leaders move faster to solve their problems. While European governments and markets have been breathing easier in recent months after years of turmoil, it’s no time for complacency, said Eichengreen, who has chronicled the Great Depression and explored the consequences of a breakup of the euro currency used by 17 nations. “Nothing has been resolved in the eurozone, where markets have swung from undue pessimism to undue optimism,” Eichengreen told The Associated Press in an interview at the World Economic Forum in Davos, Switzerland. “They said all the right things last year...and they’ve been backtracking ever since.”